International Trade Law: Bill of Lading Functions and Electronic Forms

This assignment provides an in-depth analysis of the Bill of Lading within the context of international trade law. It begins by defining the Bill of Lading and outlining its different types, including straight and negotiable, clause and clean, and shipped and received for shipment bills. The essay then explores the four key functions of the Bill of Lading: acting as a receipt for shipped commodities, serving as a document of credit, functioning as a document of title, and providing evidence of a binding contract of carriage. The assignment further evaluates the ability of electronic Bills of Lading to perform these functions, addressing legal uncertainties and considering the advantages of electronic forms. It concludes that electronic Bills of Lading can effectively perform similar functions as paper bills, especially with policy initiatives and legal amendments. The assignment references relevant case law, international conventions, and legal frameworks to support its arguments.

Running head: INTERNATIONAL TRADE LAW
International Trade Law
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction......................................................................................................................................2
Bill of Lading in the International Trade law..................................................................................2
Types of Bill of Lading....................................................................................................................2
Significant functions of Bill of Lading............................................................................................3
Bill of lading as a receipt for the shipped commodities..............................................................3
Bill of Lading as a Document of credit.......................................................................................4
Bill of Lading as a Document of Title.........................................................................................5
Bill of Lading as evidence of a binding Contract of Carriage.....................................................5
Evaluation of electronic Bill of Lading to perform functions of Paper Bill of lading.....................5
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

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Introduction
International Trade has often been a driving force to social, political, economic stability.
Bill of trading is a written contractual evidence of delivery of commodities and carriage transited
by sea in exchange of particular shipment. Generally, a shipper transports the commodities to a
carrier while the agent or carrier of the shipper issues bill of lading. Bill of Lading is said to be an
imperative document that records that certain commodities have been loaded on board a ship.
However, with the advancement in technology, the emergence of electronic bill of lading marks
the setting of electronic communication in the international trade within the maritime industry.
The paper aims at discussing four essential functions performed by the paper Bill of trading and
evaluate the ability of the electronic bill of lading to perform similar functions, in the context of
their importance to international trade (Law, 2016).
Bill of Lading in the International Trade law
In Basinco Motors Ltd v WoermannLine & Anor [2009], a bill of lading has been
defined as a written document that is signed on behalf of the owner of the ship in which the
commodities are loaded as an acknowledgement of the commodities and taking the commodities
to deliver them until the end of the journey. Such responsibility is subjected to the conditions,
which shall be stipulated in the Bill of Lading. Thus, this document shall be signified as a written
contract between people who are expressly parties to such document. .
Types of Bill of Lading
There are three types of Bill of Lading, which are as follows:

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 Straight and Negotiable Bill of Lading- this type of Bill of lading becomes negotiable
instrument when the same is provided to the carrier and is passed directly like cash.
 Clause Bill of lading and Clean Bill of Lading- A clause bill refers to bad condition of
commodities being carried. A clean Bill of lading states that the commodities are in a
good condition and are in order.
 Shipped and Received for Shipment Bills- a dispatched bill of lading is one that specifies
that commodities have been actually dispatched on board and the received for shipment
Bill denotes that the carrier has received commodities into his custody before its
shipment.
Significant functions of Bill of Lading
The owner of a ship or his representative issues the Bill of Lading. According to Article
15 of the Hamburg Rules, after the commodities are loaded in the vessel, the ship owner shall
issue a document, which must include the quantity, quality of the commodities, visible state of
the commodities, name of the shipper, port of discharge, signature of the carrier or person on its
behalf. It must also include the place of issuance of the Bill, increased limits of liability and the
date or period of delivery of the commodities at the port of discharge.
The Bill of Lading plays four important functions in the context of international law. It
plays four essential functions that are enumerated as below:
Bill of lading as a receipt for the shipped commodities
In Ogwuru v Co-op bank of E/N Ltd (1994), the court held that the Bill of Lading serves as a
receipt for commodities. The Bill of lading acts as an important document that provides evidence
of the fact that commodities have been conveyed and have been dispatched on the date stated in

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the bill. As a receipt of the commodities, Bill of Lading satisfies three separate essential qualities
such as:
 leading marks in the commodities; determines whether the commodities are in perceptible good condition and order;
 the volume and quantity of the commodities;
The statement provided by the owner of the ship is evidence of the quality and quantity of the
commodities. If the commodities are found to be inconsistent with the statement made by the
ship owner, then the party is required to establish that the commodities were not in a bad
condition. If the same is established, the carrier shall be liable for misrepresentation. In case of
such disputes relating to the condition or quantity of commodities, bill of lading shall become a
prima facie proof that the commodities were shipped under conditions stipulated in the Bill of
lading. The Bill of lading, which states that the commodities are in good condition it is known as
clean bill of lading and a bill that states the commodities are in bad condition and is not in order,
the Bill is a claused bill of lading under the Carriage of Commodities by Sea Act 1971.
Bill of Lading as a Document of credit
The documentary credit includes letter of credit transactions where the bank of the
purchaser provides a letter of credit that affects the payment of the commodities purchased. The
requirements of Bill of lading to be used as a document of credit have been stipulated under
Article 20 UCP 600. The UCP does not explicitly distinguish between a non-negotiable Bill of
lading and a negotiable Bill of lading. Banks usually require complete set of bills of lading in
case more than one bill has been issued and it shall reject any tender that is less than the
complete set of Bills. Further, a bank usually accepts a ‘clean bill of lading’ along with the other

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conditions stipulated under Article 20 of the UCP to give effect to the documentary form of
credit in favor of the purchaser.
Bill of Lading as a Document of Title
A ‘document of title’ is kwon as a deed that permits the holder of the document to handle
the commodities like the owner of the commodities. The bill of lading can be said to obtain the
actual delivery of the commodities at the designated ports (Ahmadi, Elsan & Noshadi, 2017). A
lawful holder of a bill of lading is said to have constructive ownership of the commodities. In
fact, during transition of the commodities, the owner of the commodities can trade the
commodities to another person by just conveying the bill of lading as consideration. Therefore, a
legitimate holder can easily transfer the commodities by delivering the documents to a third
person. However, a Straight Bill of Lading cannot be stated as a document of title.
Bill of Lading as evidence of a binding Contract of Carriage
The Bill of Lading acts as the only binding contract entered between the carrier and the
receiver of the commodities, which implies that the terms not incorporated in the Bill, shall be
excluded (Aikens, Lord & Bools, 2015). This is because the buyer has only the notice of the
terms stipulated in the Bills of lading and terms used outside the Bills shall amount to breach of
contract law principles as was held in Leduc & Co v Ward [1888].
Evaluation of electronic Bill of Lading to perform functions of Paper Bill of lading
The question whether electronic Bill of lading is capable of performing the purpose of the
Paper Bill of lading has been subjected to several debates. Majority of the jurisdictions rely on
bill of ladings that are in writing instead of its electronic form. Further, legal uncertainties may

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arise with respect to the evidentiary value, validity, storage of data messages and incorporation
of terms and conditions in the contract of carriage.
However, despite such arguments against using of electronic Bill of lading, traders are
using the electronic means to carry out the international transactions on the ground that paper
Bills ate insecure, expensive ad complicate to use, which often cause unnecessary delay. In
regards to the ability of electronic Bills to perform the functions of paper bills, it can be stated
that acting as an evidence of carriage and receipt of shipped commodities does not pose any
problem. The document of title function can be achieved by providing a framework through
which secured transaction laws should provide sufficient rules that enable merchants and banks
to accept the document title. Thus, the creation of security interest in an electronic document of
title shall make it capable to function like paper Bill of ladings (Gaskell, 2016).
In regards to the transferability of electronic Bill of lading, it can be performed to remove
the legal impediments with respect to the endorsement and physical delivery of the paper Bill of
lading under Article 16(f) of Model Law. According to Article 17, the data used in electronic bill
is equivalent to the paper requirement of the traditional Bill of lading. Further, Article 8(1) and
8(4) ensures that the data messages satisfies the originality, integrity, reliability requirement of
the data provided the information remain unaltered and complete.
Furthermore, as per Article [3(3)] of Hague-Visby and Article [14(1)], which requires the
carrier to issue a bill of lading on demand of the shipper and Article [3(3) (a) (b)] and Article
[3(6)] of the Hague-Visby requires the bill and certain notices to be in writing. The electronic
bill of lading may perform this function as well due to the provision in Article [1(8)] of

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Hamburg Rules, which includes telex, telegram, and electronic signature on the bill of lading,
thus, giving recognition to the electronic Bill of lading.
Conclusion
The electronic form of Bill of lading can achieve the functions of the traditional Bill of
Lading if the policy initiatives and legislative measures of states computerize port facilities and
amend the domestic laws to incorporate the electronic form of bill of lading. Electronic bill of
lading shall succeed in performing the function of negotiability that is performed by the
traditional form of bill of lading and will become the business custom in terms of time,
acceptance and amount of data usage. Thus, the electronic bill can be said to be able to perform
similar functions of paper bill of trading but with distinct procedural characteristics.

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References
1985 - UNCITRAL Model Law on International Commercial Arbitration
Ahmadi, M. R. A., Elsan, M., & Noshadi, I. (2017). Comparative Study of Bill of Lading
Function as Title Document. J. Pol. & L., 10, 188.
Aikens, R., Lord, R., & Bools, M. (2015). Bills of lading. CRC Press.
Basinco Motors Ltd v WoermannLine & Anor [2009] 13 NWLR (Pt. 1157) 149 at 186
Carriage of Commodities by Sea Act 1971.
Gaskell, N. (2016, January). Overview of Electronic Bill of Lading–Advantages & Challenges.
In Electronisation of Transferable Documents or Instruments Used in International Trade.
Law, U. M. L. U. M. (2016). on International Commercial Arbitration (1985), with amendments
as adopted in 2006 Status,(Çevrimiçi).
Leduc & Co v Ward [1888] 20 QBD 475
Ogwuru v Co-op bank of E/N Ltd (1994) 8. NWLR (Pt. 365) 685 at 687
Protocol (SDR PROTOCOL) Amending The International Convention for the Unification of
certain rules of law relating to Bills of Lading of 25 august 1924 (the hague rules), as amended
by the protocol of 23 february 1968 (visby rules)
Uniform Customs and Practice for Documentary Credits [UCP] 600
United Nations Convention on the Carriage of Commodities by Sea, 1978 (Hamburg Rules)

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